I think Krugman was right about the corporate culture at Bear, Stearns. Get a load of this from the Times today:
James Dimon tramped through the rain on Wednesday evening and strode into the headquarters of Bear Stearns, the embattled investment bank he hopes to buy for a mere $2 a share.
More than 400 Bear executives — seething, fearful and to their dismay, far poorer than they were a week ago — were waiting for him.
“I don’t think Bear did anything to deserve this,” Mr. Dimon said. “Our hearts go out to you.”
Haw. Except make a series of really bad business judgments, of course.
And now, the best, just the best:
“No one on Wall Street could have anticipated this,” [Dimon] continued.
Except those who sold short or got out in time or called bullshit (among them, Lord Eschaton, a man among Boyz, in another of the Cassandra-like moments we Dirty Fucking Hippies delight in).
“I feel terrible sometimes when people think we took advantage."
On Wall Street? Never!
I don’t think we could possibly know what you all are feeling, but I hope that you give JPMorgan a chance.”
All we are s-a-a-a-y-i-n-g ....
“In this room are people who have built this firm and lost a lot, our fortunes,” one Bear executive said to Mr. Dimon with anger in his voice. “What will you do to make us whole?”
The packed room of senior managing directors applauded.
Somehow, I don't think they're talking about spiritual wholeness, or the satisfaction of growing tomatos or making a mosaic...
Mr. Alan D. Schwartz, Bear’s chief executive, looking pale, summed it up. “We here are a collective victim of violence,” he said, his voice cracking."
Wow.
Because they feel they're entitled to stay rich.
You know what? I'm playing the world's smallest violin...
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Can I
bring my tiny violin over and do a duet with you?
As a veteran of Wall Street
there are different types of firms. I worked at Alex. Brown & Sons to start and went through two mergers, first Banker's Trust and then Deutsche Banc. Afterwards I worked at Goldman Sachs for two years. Goldman was amazing, so many resources and so much talent. Every department had two chair persons. Decisions were arrived by consensus. Being gay on Wall Street was not a problem at Goldman. There was a large LGBT staff association. Goldman sent me twice out to recruit LGBT at both UCLA and Stanford.
Goldman paid for performance and it paid well, no superstar mentality. Lloyd Blankfein was the CEO when I was there.
Bear Stearns' reputation was that of the rough and tumble cowboy mentality. They were brazen and outspoken. A second tier firm, not a bulge bracket like Goldman Sachs, Morgan Stanley, Lehman Brothers, Salomon Smith Barney (now Citibank) or Merrill Lynch.
Alex. Brown & Sons was one of the four horseman (Montgomery, Robertson Stephens and H&Q). From the mid 1960s through the mid 1990s, four investment banks provided the principal equity financing channel for emerging growth companies in the San Francisco Bay Area. The cumulative effect of three events, however, caused a major shift in the organizational landscape of the securities firms providing these fledgling companies with this crucial access to public equity markets: (1) the repeal of the Depression-era Glass-Steagall Act; (2) a volatile IPO market; and (3) the maturing of investment banking-serviced industries.
It was these events that caused Alex. Brown to be sold to BT. We had a niche business and very focused on several sectors: tech, bio-tech/health care, transportation and consumer. We were the lead banker for Krispy Kreme for example. And for Whole Foods. We were very good at what we did and our business was successful because we focused on doing right by our clients. If we made the right decision for our clients whether or not it help us or not in the long run we believed that putting clients first meant clients would stick with us. Yet The Gramm Act deregulated banking and allowed commercial banks to buy investment banks, our days were numbered. Now you why I am for regulating banking.
Wall Street folks are more liberal than many think.
Well, Charles, forgive the snark, then
And it sounds like you know something about finance, so I wish to Gawd you'd post on it. Obviously, I'm completely ignorant of it, and I bet the readers would learn a lot.
(I don't mean personal finance. I mean the financial system. What it is, what it does, WTF
is happening with the Big Shitpile, why we should reregulate, and so on.)
[x] Any (D) in the general. [ ] Any mullah-sucking billionaire-teabagging torture-loving pus-encrusted spawn of Cthulhu, bless his (R) heart.
"First they ignore you, then they ridicule you, then they fight you, then you win." -- Mahatma Gandhi